Method and system for monitoring for and reporting of lien distress events

ABSTRACT

A computer-based method of monitoring for and reporting of a lien distress event relatable to a lien against a property includes the steps of extracting loan data from a client loan portfolio, defining the lien distress event relatable to the loan data by using one or more lien distress event criterion, detecting an occurrence of the lien distress event iteratively, and notifying a client of the occurrence of the lien distress event.

CLAIM OF PRIORITY UNDER 35 U.S.C. §120

This application is a continuation of U.S. patent application Ser. No.12/783,093, entitled “METHOD AND SYSTEM FOR MONITORING FOR AND REPORTINGOF LIEN DISTRESS EVENTS,” filed May 19, 2010, now U.S. Pat. No.7,904,383, which is a continuation of U.S. Pat. No. 7,747,520, filedAug. 4, 2006, which claims the benefit and priority of U.S. provisionalpatent application No. 60/705,936, filed Aug. 5, 2005. The entiredisclosures of each of these applications are incorporated herein byreference.

FIELD

The present invention relates to real estate loans on properties andmore particularly to a method and system for monitoring loans on realproperty and the liens associated with those loans, determining when alien distress event has occurred, and reporting notice of that eventalong with additional data pertaining to the property to the lender.

BACKGROUND

When purchasing real property, purchasers often require or desire to usefinancing. During this process, the lender often acquires a lien on theproperty. Liens, usually in one of two forms, enable the lender in thecase of default on repayment of the loan, to either take possession andthen sell the property in order to repay the loan amount or to force asale of the property with first rights to the proceeds of the sale up tothe amount owed on the loan. In either case, this right is referred toas a lien.

There are also varying degrees of liens. The first or primary lender onthe property has a first lien or a first position. A second mortgageehas a second lien or a second position. Subsequent liens are prioritizedaccording to a tertiary position, usually in order of recordation. Alender higher in priority is a senior lender with respect to a lenderlower in priority. A lender lower in priority is a junior lender withrespect to a lender higher in priority.

When a sale of a property is made or forced pursuant to the rights ofone lender's lien, other lenders having liens on the same property havea right of repayment in the specified order of priority. So, forexample, a second loan may be taken out on a property in order to makehome improvements on the property, and the corresponding secondarylender may place a secondary lien on the property. In this case, thefirst mortgage lien has first position and the second mortgage lien hassecond position. If either loan defaults, the property may be sold andthe first loan would be paid off prior to the second loan. Any remainderwould be used to pay down the second loan, any remainder thereafterwould pay off tertiary positions, and any final remainder would bereturned to the mortgagor.

Second and tertiary position lien holders (hereinafter secondaryposition lenders or secondary position lien holders) are often not aswell-equipped to handle potential defaults as a first position lienholder. Secondary position lenders may have limited monitoringresources, or may roll their individual loans into a larger portfolio ofloans, which makes monitoring the loans individually more complicatedand time-consuming. Often, loans on properties are sold, traded orgrouped, such that keeping track of liens and potential defaults onproperties under which a secondary lender would be entitled to someportion of foreclosure sale proceeds becomes a cumbersome administrativetask.

When one lien holder initiates a foreclosure proceeding, the other lienholders may be notified. Notification by mail of the fact of foreclosureproceedings on a property may be the first and only indication of suchproceedings intended to reach a secondary lien holder. Due to limitedmonitoring capability, a secondary lien holder may not learn of theseforeclosure proceedings in a timely fashion and therefore may be unableto take appropriate measures to enforce its lien. Where the secondarylien holder is a corporation, internal delays within the corporationafter receipt of the notification may likewise prevent the corporationfrom taking protective action. Also, notification by mail may be aproblem because the address may not be current or valid.

In a typical scenario, while the mortgagor may be delinquent in makingpayments to a primary lender, secondary or junior lenders may still bereceiving timely payments. Many secondary lenders do not beginresearching potential foreclosure issues until there has been asubstantial delinquency, e.g., 60 or 90 days, in repayment of their ownloan. Thus, the secondary lender whose policy it is to begin researchingat the onset of a 60 or 90 day delinquency may find that the primarylender has already initiated, or perhaps even resolved foreclosureproceedings on the property.

Therefore, there exists a problem in the industry whereby secondary lienholders often miss opportunities to collect on foreclosure proceedsafter a first position or other position lender initiates foreclosureproceedings. The other lenders may know nothing about these proceedingsor the potential distress event until after the foreclosure proceedingshave occurred or until shortly before they have occurred. What is neededin the industry is an automated method and system for monitoring eventsassociated with a loan that are symptomatic of properties at risk offoreclosure, well in advance of actual foreclosure.

SUMMARY

The present invention provides a method or system for monitoring loanactivity and for reporting, based on the monitored activity, propertiesat risk of foreclosure in advance of foreclosure. Loan activity ismonitored for the occurrence of a lien distress event, such as adelinquency, a delinquency duration, a delinquency frequency, a default,or commencement of foreclosure proceedings by a lien holder. Once a liendistress event occurs, notice of the event is forwarded to an interestedlender. Additional data pertaining to the subject property, such ascurrent property values, information on other lien holders, andpotential for recovery may be reported along with the notice. This datamay be used to help the lender prepare for foreclosure proceedings andto enable it to initiate appropriate measures to protect its lien.

A computer-based method of monitoring for and reporting of a liendistress event relatable to a property of interest within a client loanportfolio includes the steps of inputting property data from the clientloan portfolio, standardizing the input property data into a form foruse in querying a lien distress event database, and monitoring the liendistress event database for lien distress events relatable to thestandardized property data. If a lien distress event relatable to thestandardized property data is detected in the lien distress eventdatabase, a step of notifying the client of the lien distress event maybe performed. The monitoring step may be performed periodically, and theclient may specify the monitoring period as well as the type of liendistress event that may trigger a notification, e.g., a lien distressreport delivered to the client. The standardized property data mayinclude property address or borrower identification data, and the liendistress event database may be a public records database or a creditreporting database. Lien distress events may include bankruptcydeclarations, delinquent payments, defaults, negative credit reportingevents, or foreclosures. A client may subscribe to a service thatperforms the method automatically, and the client may update the loanportfolio for monitoring.

A system may include a client station for inputting lender loan data formonitoring, an FTP server for uploading the lender loan data from theclient station, and a mainframe server for accessing a lien distressevent database. The mainframe server may use a data standardizationmodule to standardize the lender loan data, a database search engine forsearching the lien distress event database, and a report generatingmodule for reporting to the client station via the FTP server liendistress events relating to the lender loan data.

Because a lender may need adequate time to prepare property valuationsand to gather other relevant data about a property prior toparticipating in a foreclosure proceeding, providing advance notice oflien distress events to a lender is a valuable service. Therefore, amethod and system are disclosed that enables lenders to quicklyascertain the status of a distressed property based on the occurrence oflien distress events. A lender may establish threshold values for avariety of metrics based on lien distress events, such that, for anyproperty being monitored, the lender may receive a timely automatedwarning whenever a minimum threshold is exceeded.

BRIEF DESCRIPTION OF THE DRAWINGS

The features, objects, and advantages of the present invention willbecome more apparent from the detailed description set forth below whentaken in conjunction with the drawings, wherein:

FIG. 1 is a flow chart depicting a method for monitoring for andreporting of lien distress events according to an embodiment of thepresent invention.

FIG. 2 is a flow chart depicting a method for monitoring for andreporting of lien distress events according to an embodiment of thepresent invention.

FIG. 3 is a flow chart depicting a method for monitoring for liendistress events and for reporting the events according to clientnotification criteria according to an embodiment of the presentinvention.

FIG. 4 is a system for monitoring for and reporting of lien distressevents according to an embodiment of the present invention.

DETAILED DESCRIPTION

The present invention provides a method or system for monitoring for andreporting of lien distress events. When a lien distress event isdetected, the present invention provides useful information to a lienholder well in advance of potential foreclosure proceedings. Theinformation is then used to enable a lien holder to decide what courseof action to take in response to the potential or actual lien distressevent.

In a typical scenario, foreclosure proceedings on a property may beforeseeable based on the occurrence of events in advance of mortgagordefault that are symptomatic of a property destined for foreclosure.Herein, such symptomatic events are termed lien distress events. Oneexample of a lien distress event is a failure on the part of a mortgagorto make a timely payment on a first or second mortgage, i.e., adelinquency. A lender in a tertiary position who is receiving timelypayments against its loan may be oblivious to this type of lien distressevent if it is not also monitoring activity on the other mortgages.Another example of a lien distress event is a negative credit reportingevent appearing on the credit history of a party named on the loandocuments relating to the property. Another example of a lien distressevent is a bankruptcy filing. Many other possible lien distress eventsmay be defined based on metrics or statistics ascertainable from liendistress event databases, such as public records databases or creditreporting databases maintained by credit reporting agencies. Examples ofpublic records databases may include title transfer records maintainedby county governments. These may be accessed, for example, through agovernment website or through a subscription service such asLexis-Nexis. Examples of credit reporting agencies may include Equifax,Experian, Trans Union, and Dun & Bradstreet. Examples of other liendistress events ascertainable as a metric or statistic from liendistress event databases may include a delinquency frequency, adelinquency trend (e.g., increasing lateness), a credit score, a creditscore trend (e.g., rate of decline), a frequency of negative creditreporting events, a loan repayment default, etc., or some combination ofany of the foregoing. Lien distress events indicative of ahigh-probability foreclosure may be determined empirically from variousmetrics or statistics based on case histories.

FIG. 1 is a flow chart depicting a method 100 for monitoring for andreporting of lien distress events. Method 100 may be executed as aseries of automated instructions stored in memory as software, hardware,or combinations thereof, executable by a controller, processor, orprocessing device. Method 100 may be performed using a computer system,or using a network of computers, such that one step of method 100 may beperformed by one computer, and another step of method 100 may beperformed by another computer. Method 100 may describe steps performedautomatically as a service for a subscriber or client.

Method 100 may begin with step 102. In step 102, data relating toproperties may be input or received from a client loan database orportfolio. A client may be a lender or lien holder in possession of aportfolio of loans. The portfolio of loans may be represented by datapertaining to properties and mortgagors that correspond to each loan andeach loan in the portfolio may be represented by a portion of the data.The portfolio may be stored, e.g., as electronic data in a database orinformation archive, where each loan corresponds to a record that mayinclude a plurality of data fields, where each data field may beupdated, and where each record may be accessed, retrieved, modified,saved, and appended with new fields. Thus, inputting property data froma client loan portfolio according to step 102 may include manuallyinputting data by a user interface, or automatically loading propertydata using software capable of accessing records in the portfolio.

In step 104, the property data input from step 102 may be standardized.Standardizing the property data may involve converting property datainput from the client loan portfolio, as necessary, into a formacceptable for querying a lien distress event database. In one example,the standardization step may convert property data representing a streetaddress into a form recognizable as a street address by the liendistress event database. In another example, the standardization stepmay convert property data representing a mortgagor identity into a formrecognizable as a borrower name by the lien distress event database.Converting property data to a form of data recognizable by a liendistress event database may require reading the property data andreproducing the property data in a modified form. For example, theproperty data may be converted by rearranging the property data to arecognizable form, or by adding additional operators (e.g., ASCIIcharacters) to the property data in a predetermined format. In anotherexample, the property data may be converted by appending it as anargument within a predefined function. In another example, when propertydata has been previously matched to a record stored in a lien distressevent database, converting the property data may include assigning aunique identifier to the property data to designate that it relates to acertain record stored in the lien distress event database.

Method 100 then proceeds to step 106. In step 106, one or more liendistress event databases may be monitored for lien distress eventsrelated or relatable to customized property data derived from a clientloan portfolio. In one embodiment, step 106 monitors the lien distressevent databases for any records containing the identity of the borrowersand/or the address of the subject property. The lien distress eventdatabases are monitored to discover whether any lien distress events arelisted in relation to the borrower identity or the address of thesubject property. Note that a borrower identity may include a name, analias, a social security number, a government identification number, orany other personal indicia. In one embodiment, monitoring step 106 maysearch the lien distress event databases for any negative creditreporting events, bankruptcy declarations, delinquent payments,defaults, or foreclosures associated with the property address orborrower identity. In other embodiments, monitoring step 106 may beperformed using standardized data from step 104 continuously,periodically, or upon a demand by a client.

Next, decision step 109 may decide on appropriate action depending onwhether a lien distress event is detected while monitoring the liendistress event databases. For each query associated with customizedproperty data, as long as no lien distress event is detected, the methodmay loop back to step 106 to monitor the lien distress event databasesagain, according to the continuous, periodic, or on-demand monitoringfrequency desired. When a lien distress event associated with customizedproperty data is detected, the method may proceed to step 112. In step112, the client may be promptly notified of the detected lien distressevent. In one embodiment, notification in step 112 may includetransmitting an electronic message to the client to alert the client ofthe lien distress event. In another embodiment, step 112 may includesending to a client a periodic report of lien distress events pertainingto all customized property data derived from the client's loanportfolio.

The method can monitor available databases to determine whether liendistress events indicative of potential foreclosure have occurred inadvance of actual foreclosure, and if so, provide an early warning to alien holder to enable the lien holder to take protective action. Forexample, by monitoring a credit reporting database, the method maydetect and report a severe delinquency in a car payment. Even though theloan associated with the car payment is unrelated to any liens on realproperty under mortgage, the delinquency may indicate a mortgagor'spotential inability to satisfy an upcoming payment on a home loan.

In another example, a method according to the invention may monitor apublic record database for lien distress events. Any relevant publicrecord data that may be relevant to, or indicative of property indistress, may be monitored and discovered. Relevant public record datamay include data such as a notice of default or lis pendens, financinginformation, foreclosure information, a sale, and a change in title.Monitoring this type of data may provide an effective way to protect ajunior lien holder from surprise delinquencies or defaults. Because ofincreased privacy concerns and shear volume of work, the data orinformation may not be readily available or obtainable for junior lienholders to monitor. This information may not be readily obtainable orpractical for the junior lien holder to monitor with respect to everyloan it services. The method may automate the monitoring and reportingprocess on behalf of a junior lender.

FIG. 2 is a flow chart depicting a method 200 for monitoring for andreporting of lien distress events. All or a portion of method 200 may beperformed automatically as a service to a client, e.g., a lender orfinancial institution in possession of an extensive loan portfolio andin need of an automated service for monitoring property data associatedwith loans in the portfolio for the occurrence of lien distress events.

Step 202 may involve inputting or receiving property data from a clientloan portfolio or a client loan database in a manner similar to thatexecuted in the initial step of method 100. In the next step 204, theproperty address and the identity or identities of the owners of thesubject property are extracted from the property data input in step 202.The extracting step 204 may also involve a data conversion to convertthe property address and owner identity into a form recognizable as aproperty address and owner identity, respectively, by a lien distressevent database. Alternatively, the extracting step 204 may involvecopying that portion of the property address or owner identity needed toformulate an appropriate query to a lien distress event database. Forexample, step 202 may involve inputting property data from a client loanportfolio into an electronic database having a format compatible withsoftware executed in extracting step 204. In this example, in theextracting step, only the property address and owner identity data maybe extracted from the electronic database in extracting step 204, whileany extraneous information contained in the electronic database (forexample, information related to the database structure) may not beextracted.

The method may proceed into one or more processing steps according tothe number or type of lien distress event database selected formonitoring. In the embodiment of method 200, two processing steps 206and 207 are shown. These two steps are shown for purposes ofillustration only, and are not intended to limit the present inventionto merely two steps. A method according to the invention may employ oneor more processing steps as needed or desired.

In step 206, one or more lien distress event databases containing publicrecords may be monitored for lien distress events related or relatableto the subject property. During this monitoring step, property addressand property owner identity data extracted in step 204 may be used toformulate appropriate search criteria for detecting a lien distressevent. In the decision block of step 208, if a lien distress event isnot detected, the method loops back to step 206 to continue themonitoring process. Continuation of the monitoring step may occuraccording to a frequency specified by a client. In one embodiment,continuation of the monitoring step may be performed according to adefault frequency of once per day.

In addition to the performance of steps 206 and 208, steps 207 and 209may be performed. In step 207, one or more lien distress event databasescontaining credit reporting events may be monitored for lien distressevents. Preferably, during this monitoring step, property owner identitydata extracted in step 204 may be used to formulate appropriate searchcriteria for detecting a lien distress event. In other embodiments,property address data may also be used during this monitoring step. Instep 209, if a lien distress event is not detected, the method loopsback to step 207 to continue the monitoring process according to aselected or default frequency.

In either step 208 or 209, if a lien distress event is detected during amonitoring step, method 200 proceeds to step 211. In step 211, a liendistress report is generated. In one embodiment, the lien distressreport may be maintained in an electronic memory. In another embodiment,the lien distress report may be maintained in an electronic memory andupdated with additional lien distress event information as thatinformation becomes available in the course of continued monitoring oflien distress event databases. In another embodiment, step 211 mayinclude printing a hard copy of the lien distress report.

In step 212, the lien distress report may be delivered to a client uponreceiving a client request. By withholding the lien distress reportuntil receiving a client request, the lien distress report may beupdated over a selected time period, and may be updated with informationpertaining to many properties extracted from a client loan portfolio.The lien distress report in the form of a hard copy may be delivered toa client by mailing, or the lien distress report may be delivered to aclient electronically by any number of methods known in the art.Alternatively, the lien distress report may be automatically andelectronically delivered to a client immediately after the lien distressevent has been detected. The occurrence of the lien distress event maytrigger the system to automatically send the lien distress report to theclient.

A lien distress report may include data reporting the fact of a liendistress event, as well as the property address and the identity oridentities of the property owners. A lien distress report may alsoinclude additional data pertaining to the subject property. For example,data retrievable from a public records database may be used to create anautomated valuation of the subject property, and the valuation may beincluded in the lien distress report. An automated valuation may behelpful in allowing a client to determine the extent to which aparticular lien may be covered by the current value of the property.Other data included in a lien distress report may be retrieved directlyfrom a credit reporting database, public records database, or othersource of information relevant to the property, to a lien on theproperty, to a loan on the property, or to the owner or owners of theproperty. Additional data on a lien distress report may include anyforeclosure rescissions, final judgments, transactions involving theproperty, lien amounts, and contact information for other lenders. Taxdelinquency data may also be sent along with a lien distress report. Taxdelinquency may affect the total value of the property attainable shouldforeclosure of a loan be necessary. Also, if relevant, a complete orpartial credit history of the owner or owners may be provided as part ofthe lien distress report.

The data selected for inclusion on a lien distress report may begathered in generation step 211 and sent to a client in step 212 as alien distress report indicating the lien distress event or events thattriggered generation of the report. The lien distress report is intendedas a beneficial early warning device to alert a lender, who may then usethe report as starting point for further research on the property andthe lien distress event. The report may thus serve as an excellentjump-start to the research process prior to actual default orforeclosure proceedings initiated by another lien holder. The report maysignificantly lessen the time required to research the property and anyother liens associated with it, and assist a client in determiningwhether foreclosure may be imminent. In one embodiment, lien distressreports may be generated daily for each property being monitored forwhich there is a lien distress event.

In another embodiment, the lien distress report and related data may notbe sent to the lien holder directly, but may be made available to aclient by allowing the client to download the report from a serveraccessible over a network. In this case, a notification of a distressevent may be sent directly to a client. The notification may be sentconcurrently with detection of the lien distress event, concurrentlywith generation of the lien distress report, or after the lien distressreport is available. In one embodiment, the lien distress report andrelated data may be made accessible to the lien holder using a FileTransfer Protocol (FTP) client. In another embodiment, lien distressreports may be generated periodically and uploaded to an FTP server.Alternative time-frames may be used in different embodiments of theinvention. The client may then access uploaded reports using standardFTP client software and a login. In another embodiment, secureencryption may be used during a login and file-transfer process.

FIG. 3 is a flow chart depicting a method 300 for monitoring for andreporting of lien distress events. All or a portion of this method 300may be implemented as a service to a client in need of automated liendistress event monitoring and reporting. In step 302, property data isinput from a client loan portfolio, as in previous embodiments. Then, instep 303, a client may input custom lien distress event notificationcriteria. This allows a client to select one or more specific types oflien distress events which, if detected, may trigger a lien distressevent notification. For example, a client may be interested in learningwhether a property has gone into foreclosure. In that case, the clientmay specify in step 303 that the client be notified of lien distressevents that indicate actual foreclosures on properties included withinthe client loan portfolio. In another example, a client may specify athreshold value in step 303, such that the client be notified of liendistress events that indicate monthly payment delinquencies in excess ofthe threshold. In other examples, lien distress events thresholds suchas a 60 or 90 day delinquency on a loan may be specified in step 303, orlien distress events such as an owner bankruptcy, or an event indicatinga transfer of property may be specified in step 303 as criteria fortriggering notification of the lien distress event. Any detectable liendistress event, or any combination of detectable lien distress events,can form a client's lien distress event notification criteria input instep 303. Furthermore, a client may establish threshold values based onstatistics derivable from the occurrence of lien distress events.Examples of derivable statistics may include an average delinquencyduration, an average number of delinquent payments in a given timeperiod, a rate of increasing delinquencies, a rate of increasingindebtedness, an average number of credit inquiries per month, afrequency of liens filed on properties associated with a borrower name,and so on. Those well versed in statistics should recognize that thescope of statistics based on lien distress events is potentiallyunlimited.

The next steps in method 300 may include a standardization step 304, amonitoring step 306, and a decision block 308. These steps are similarto corresponding steps described in preceding embodiments. If a liendistress event is not detected in decision block 308, the method loopsback to step 306. If a lien distress event is detected in decision block308, the method proceeds to another decision block 310. In decisionblock 310, the method determines whether the detected lien distressevent satisfies criteria input by the client in step 303. If not, themethod loops back to step 306. If so, the method proceeds to step 312.In step 312, a notification in the form of a lien distress report issent to the client. The contents of a lien distress report may includethe triggering event, relevant property and ownership data, and anyother relevant data as previously described.

In another embodiment, a step (not shown) may be included after step 310for generating a lien distress report, and then step 312 may beperformed upon receiving a client request for the report. In stillanother embodiment, a client may customize the contents of a liendistress report by specifying, in a preliminary step, the type ofinformation to be provided in a lien distress report. For example, aclient may specify in input step 303 that a lien distress report includean updated credit history of the property owner. Then, the lien distressreport delivered to the client in step 312 may be customized accordingto the client's specifications. In other embodiments, the client mayspecify monitoring frequency for lien distress events, and also deliveryoptions for the lien distress report.

FIG. 4 is a system 400 for monitoring for and reporting of lien distressevents according to an embodiment of the present invention. Any of theforegoing methods of the invention may be executed as a series ofprocess steps using hardware and/or software modules shown in FIG. 4.

FIG. 4 may include three subsystems. The first subsystem may include oneor more client stations 420. For simplicity, only one such clientstation is depicted in the figure, although other embodiments arepossible which include any number of client stations. The secondsubsystem may include a file transfer protocol (FTP) server 430. Thethird subsystem may include a mainframe server 440. In one embodiment,mainframe server 440 may include a mainframe computer that also mayinclude, or has access to, one or more lien distress event databases.Client station 420 may communicate with FTP server 430 via a networklink 450. FTP server 430 may communicate with mainframe server 440 via anetwork link 460. Network links 450 and 460 may be separate local areanetwork links or wide area network links, and may connect a plurality ofclient computers, FTP servers, and mainframe servers in any conventionalconfiguration such as bus, star, or ring. In another embodiment, networklinks 450 and 460 may represent the same network, such as a local orwide area network or the Internet.

A client station 420 may include a computer 421 linked to a memory 422.In one embodiment, computer 421 may operate on a conventional platformdesigned for personal computers such as Windows, LINUX or Macintosh.Memory 422 may be any computer readable memory such as a hard disc,floppy disc, RAM, ROM, EEPROM, CD-ROM, flash memory, or other internalor external optical, magnetic, or solid-state device, or any combinationof the foregoing. In one embodiment, memory 422 may include a clientloan portfolio 423, a property data extraction module 424, a clientloans for monitoring database 425, and an FTP client software module426. In another embodiment, each of the client loan portfolio 423, theproperty data extraction module 424, the client loans for monitoringdatabase 425, and the FTP client software module 426 may be accessed orexecuted by computer 421.

Client loan portfolio 423 may be a database or other archival storagemedium or software module for inputting, updating, and saving electronicdata. In one embodiment, a client may be a lender or lien holder, andclient loan portfolio 423 may contain data associated with a pluralityof the client's loans. Data stored on client loan portfolio 423 mayinclude records associated with each loan in the portfolio. Each recordmay contain information for each loan such as a property address andborrower identification, and may include a variety of additionalinformation associated with the loan or the property such as selleridentity, property descriptions, appraisal information, selling price,loan amount, loan number, contractual terms, effective dates, insuranceinformation, property tax information, closing statements, etc.

Property data extraction module 424 may be an application that allows aclient to identify which records, i.e., which loans, from its clientloan portfolio the client wishes to select for lien distress eventmonitoring. Property data extraction module 424 may allow the client toextract key information from selected loans, and write the keyinformation to client loans for monitoring data file 425, which may be adatabase, a spreadsheet, a text file, or another type of data file. Keyinformation written to client loans for monitoring data file may be aminimum amount of information needed to perform lien distress eventmonitoring for one or more loans from client loan portfolio 423. Oneexample of key information is property address data for each selectedloan. Another example of key information is borrower identification datafor each selected loan. Another example may be any combination of dataextractable from client loan portfolio associated with a single loan. Inone embodiment, key information extracted to client loans for monitoringdata file 425 may be written to a text file using specified numbers ofcharacters for each property and for other property data associated witheach property.

Once the client loans for monitoring data file 425 is created, it may beuploaded to FTP server 430 using FTP client software module 426. FTPclient software module 426 may be any appropriate FTP client softwarefor initiating communication with an FTP server 430 for the purpose ofexchanging or transmitting electronic files via network link 450. FTPclient software module 426 may enable computer 421 to perform filemanipulation operations such as uploading files, downloading files, andreading from or writing to files on a server or another computerconnected to network link 450. In one embodiment, FTP client softwaremodule communicates using TCP/IP protocol.

FTP server 430 may upload client loans for monitoring data file 425 vianetwork link 450 and store it locally. In one embodiment, FTP server 430may include a computer 431 coupled to a memory 432. Computer 431 andmemory 432 may be similar to computer 421 and memory 422 of clientstation 420. In one embodiment, computer 431 may function as anapplication server dedicated to providing lien distress event monitoringand reporting services to one or more client stations 420. In anotherembodiment, computer 431 and memory 432 may form an enterprise serversuch as a Sun Microsystems computer running a UNIX-based Solaris orLinux operating system, or a Hewlett-Packard (HP) computer running aMicrosoft Windows operating system, or an IBM computer running aniSeries operating system, or equivalent.

FTP server 430 may store a local file version of client loans formonitoring data file 425 in the same or similar format used on clientstation 420. Alternatively, it may store the information contained inclient loans for monitoring data file 425 in a different format. Oneexample format for this information stored in memory 432 is a text file,labeled in the figure as Loandata.txt file 434. In one embodiment, theinformation from client loans for monitoring data file 425 may bewritten as Loandata.txt file 434 to FTP server 430 using a Secure SocketLayer (SSL) encryption. Loandata.txt file 434 may list key informationin a character delimited or space delimited file. An FTP server softwaremodule 433 enables uploading and downloading of files to and from FTPserver 430 via network links 450 and 460.

Any of the methods according to the present invention may be implementedthrough interaction between FTP server 430 and mainframe server 440.Mainframe server 440 may be any computer or computer system capable ofserving a plurality of users simultaneously and performing bulk dataprocessing requests for public records and/or consumer statistics andinformation. The hardware of mainframe server 440 is represented in thefigure as computer 441. Computer 441 is coupled to a memory 442, whichmay any type of memory or combination of memory devices known in theart. Memory 442 contains operating system software, software modules,applications, and data executable and/or accessible by computer 441. FTPserver software module 443 accessible by computer 441 enables uploadingand downloading of files to and from mainframe server 440 via networklink 460.

Client loan information to be monitored for lien distress eventscontained on FTP server 430 in a file such as Loandata.txt file 434 maybe downloaded to mainframe server 440 via network link 460. In anembodiment using SSL, Loandata.txt file 434 may be encrypted by FTPserver 430 prior to transmission, and decrypted by mainframe server 440after receipt. Once downloaded, and (if necessary) decrypted, computer441 may execute data standardization module 444 to re-form keyinformation associated with the client loans into a standardized formatthat is readable by a database search engine 446. The key information,now in standardized format, may be stored in a client loans updatingmodule 445.

Client loans updating module 445 may be created upon an initialdownloading (or receipt) of client loan information from a particularclient. There may be one client loans updating module 445 for eachclient using mainframe server 440 for lien distress event monitoring. Ifa client loans updating module 445 has been previously established for aclient when a subsequent downloading of client loan information for thesame client is standardized by data standardization module 444, theclient loans updating module 445 may be updated with the newinformation. In this way, a mainframe server 440 can maintain up-to-daterepresentation of a loan portfolio for each client that it serves.

Database search engine 446 monitors or searches for lien distress eventsassociated with a client loan portfolio by querying a records database447. The contents of a query may use key information retrievable fromclient loans updating module 445. A query may be presented to recordsdatabase 447 in such a way that records database 447 may return a liendistress events when key information (e.g., property address or borroweridentification) or other standardized client loan information matchesinformation associated with the lien distress event recorded in recordsdatabase 447. Records database 447 may include one or more of publicrecords databases (e.g., transaction databases or property databases),credit reporting databases, property information databases, or consumerinformation databases. Records database 447 may be queried in thismanner according to a predetermined frequency, or periodically asspecified by a client.

While monitoring for lien distress events, whenever a lien distressevent is detected that relates to a loan in a client loan portfolio,computer 441 may initiate notification of the lien distress event in theform of an electronic communication transmitted to the client overnetwork link 460. FTP server software module 443 may be used to effectthis communication. In addition, computer 441 may execute reportgenerating module 448, which creates a report listing the lien distressevents detected in records database 447. The report may includeinformation describing one or more lien distress events, the property orproperties associated with the lien distress events, borroweridentification, and other information associated with the property orborrowers. For example, a property valuation summary retrieved fromrecords database 447 may be included in the report. In one embodiment,the report may be saved as a text file, and the text file may becharacter or space delimited. The report may be stored in memory 442,encrypted, and/or transmitted using SSL (if necessary) as a form ofnotification to a client via network link 460 by computer 441 using FTPserver software module 443. When uploaded to FTP server 430, the reportmay be saved in memory 432. In one embodiment, the report may be savedin memory 432 on FTP server 430 as Notice.txt file 435.

A client may then retrieve the report by downloading Notice.txt file 435from FTP server 430 using SSL (if necessary), and the appropriate FTPclient and server software modules. Using appropriate software, computer421 may convert Notice.txt file 435 into a form readable by a client,for example, by displaying the text or printing a hard copy. Notice.txtfile 435 may be saved in memory 426 for later review. The client maythus be apprised of any lien distress events affecting propertyassociated with loans in the client loan portfolio 423. Client station420 may also update loan records in client loan portfolio 423 with liendistress event information received in Notice.txt file 435.

In alternative embodiments, a plurality of records databases may bemonitored, and a lien distress report may be generated for each, or onereport may be generated based on information retrieved from more thanone records database. Additionally, in alternative embodiments, liendistress reports may be generated periodically regardless of theoccurrence of any lien distress event.

The invention has been disclosed in an illustrative style. Accordingly,the terminology employed throughout should be read in an exemplaryrather than a limiting manner. Although minor modifications of thepresent invention will occur to those well versed in the art, it shallbe understood that what is intended to be circumscribed within the scopeof the patent warranted hereon are all such embodiments that reasonablyfall within the scope of the advancement to the art hereby contributed,and that that scope shall not be restricted, except in light of theappended claims and their equivalents.

1. A computer-based method of monitoring for and reporting of a liendistress event relatable to a property, comprising: receiving, using aprocessor, loan data from a client loan portfolio, the loan datarelatable to the property; periodically monitoring, using the processor,for the lien distress event relatable to the loan data by accessing apublic records database and a credit reporting database; and generating,using the processor, a report including a result of the periodicallymonitoring for the lien distress event relatable to the loan data. 2.The method of claim 1, wherein: the loan data comprises property addressdata and borrower identification data, and the lien distress event isrelatable to the property address data and the borrower identificationdata.
 3. The method of claim 1, further comprising: defining, using theprocessor, the lien distress event by receiving at least one liendistress event criterion or setting a threshold value for the at leastone lien distress event criterion, wherein the lien distress event ispredetermined or user defined.
 4. The method of claim 3, wherein the atleast one lien distress event criterion is selected from a groupconsisting of a loan repayment default status, a property foreclosurestatus, a monthly payment delinquency status, a monthly paymentdelinquency trend, a borrower credit score, a borrower credit trend, aborrower bankruptcy status, a property transfer status, and combinationsthereof.
 5. The method of claim 3, wherein the periodically monitoringincludes searching, at a predefined monitoring frequency, the publicrecords database and the credit reporting database for a record meetingthe at least one lien distress event criterion.
 6. The method of claim3, wherein the at least one lien distress event criterion comprises athreshold value for a number of occurrences of the lien distress event.7. The method of claim 1, further comprising: sending, using theprocessor, the report to a client on a periodic basis or at apredetermined frequency.
 8. The method of claim 1, wherein the reportincludes an absence of the lien distress event or a number ofoccurrences of the lien distress event.
 9. A computer-based method ofmonitoring for and reporting of a lien distress event relatable to aproperty, comprising: receiving, using a processor, property addressdata of the property from a client loan portfolio; periodicallymonitoring, using the processor, for the lien distress event relatableto the property address data by accessing a public records database anda credit reporting database; and generating, using the processor, areport including a result of the periodically monitoring for the liendistress event relatable to the property address data.
 10. The method ofclaim 9, further comprising receiving, using the processor, at least onelien distress event criterion that is predetermined or user defined. 11.The method of claim 10, wherein the at least one lien distress eventcriterion is selected from a group consisting of a loan repaymentdefault status, a property foreclosure status, a monthly paymentdelinquency status, a monthly payment delinquency trend, a borrowercredit score, a borrower credit trend, a borrower bankruptcy status, aproperty transfer status, and combinations thereof.
 12. The method ofclaim 10, wherein the periodically monitoring includes searching, at apredefined monitoring frequency, the credit reporting database for arecord meeting the at least one lien distress event criterion.
 13. Themethod of claim 10, wherein the at least one lien distress eventcriterion comprises a threshold value for a number of occurrences of thelien distress event.
 14. The method of claim 9, further comprising:sending, using the processor, the report to a client on a periodic basisor at a predetermined frequency.
 15. The method of claim 9, wherein thereport includes an absence of the lien distress event or a number ofoccurrences of the lien distress event.
 16. A computer-based method ofmonitoring for and reporting of a lien distress event relatable to aproperty, comprising: receiving, using a processor, property addressdata of the property from a client loan portfolio; periodicallymonitoring, using the processor, for the lien distress event relatableto the property address data by accessing a public records database anda credit reporting database; and generating, using the processor, areport including a result of the periodically monitoring for the liendistress event relatable to the property address data.
 17. The method ofclaim 16, further comprising receiving, using the processor, at leastone lien distress event criterion.
 18. The method of claim 17, whereinthe at least one lien distress event criterion is selected from a groupconsisting of a loan repayment default status, a property foreclosurestatus, a monthly payment delinquency status, a monthly paymentdelinquency trend, a borrower credit score, a borrower credit trend, aborrower bankruptcy status, a property transfer status, and combinationsthereof.
 19. The method of claim 17, wherein the periodically monitoringincludes searching, at a predefined monitoring frequency, the publicrecords database for a record meeting the at least one lien distressevent criterion.
 20. The method of claim 17, wherein the at least onelien distress event criterion comprises a threshold value for a numberof occurrences of the lien distress event.
 21. The method of claim 16,further comprising: sending, using the processor and via the computernetwork, a notification to a client upon detecting the lien distressevent.
 22. The method of claim 16, wherein the report includes anabsence of the lien distress event or a number of occurrences of thelien distress event.
 23. A system for monitoring for and reporting of alien distress event relatable to a property, comprising: a clientstation receiving loan data relatable to the property; a first serveruploading the loan data from the client station; and a second servercoupled to the first server, the second server comprising: a datastandardization module configured to standardize the loan data, adatabase search engine configured to periodically monitor the liendistress event relatable to the loan data by accessing a public recordsdatabase and a credit reporting database, and a report generating modulefor generating a report including an absence of or an occurrencefrequency of the lien distress event within one or more predefinedperiods.
 24. The system of claim 23, wherein: the loan data comprisesproperty address data and borrower identity data, and the lien distressevent is relatable to the property address data and the borroweridentity data.
 25. The system of claim 23, wherein the lien distressevent is defined by receiving a criterion from the client station, andthe criterion is selected from a group consisting of a loan repaymentdefault status, a property foreclosure status, a monthly paymentdelinquency status, a monthly payment delinquency trend, a borrowercredit score, a borrower credit trend, a borrower bankruptcy status, aproperty transfer status, and combinations thereof.
 26. A system formonitoring for and reporting of a lien distress event relatable to aproperty, comprising: a first processor configured to receive borroweridentification data and property data from a client loan portfolio; anda second processor coupled to the first processor and configured to:periodically monitor a public records database for the lien distressevent relatable to the property data and a credit reporting database forthe lien distress event relatable to the borrower identification data,and generate a report including an absence of or an occurrence frequencyof the lien distress event within one or more predefined periods. 27.The system of claim 26, wherein the first processor is configured tostandardize the property data by extracting property address data fromthe property data.
 28. The system of claim 26, wherein the firstprocessor is configured to standardize the property data by extractingthe borrower identification data from the property data.
 29. The systemof claim 26, wherein the first processor is configured to notify aclient when a statistic derived from the occurrence frequency of thelien distress event of the report exceeds a predefined threshold. 30.The system of claim 26, wherein: the first processor is configured toreceive a criterion for defining the lien distress event, and thecriterion is selected from a group consisting of a loan repaymentdefault status, a property foreclosure status, a monthly paymentdelinquency status, a monthly payment delinquency trend, a borrowercredit score, a borrower credit trend, a borrower bankruptcy status, aproperty transfer status, and combinations thereof.